Archer DAO
Published in

Archer DAO

Archer Team

Nov 2, 2020

4 min read

Introducing Archer

A new revenue source for miners and block producers

Miners are the invisible guardians of Ethereum. Every Ethereum transaction is published by a miner and stored on the shared ledger. Every mined block further secures Ethereum’s rich history.

Today, miners are compensated by block reward subsidies and transaction fees. Archer introduces a valuable new revenue stream for miners by executing profitable on-chain opportunities.

Archer is a sustainable revenue source that boosts miner revenue and strengthens the Ethereum ecosystem.

The Unstable Foundation of Mining Revenue

Ethereum miners currently earn around 11,500 ETH per day in block rewards. Historically, these rewards have formed the vast majority of revenue. However, miners cannot fully rely on revenue from block rewards. For example, in August 2020, Ethereum community members proposed a block reward reduction of 75%.

“There is no social contract, nor has there ever been, that miners should expect Ethereum block rewards to remain fixed indefinitely. This has been the case since 2016 when the rewards were cut for the first time.” — John Lilac

This summer, miners began to accrue significant transaction fees. In September, for the first time ever, miners earned more in transaction fees than block rewards.

A history of variable mining rewards (Source: The Block)

Mining operations carry risk. Revenue is variable and forecasting is an exercise in uncertainty. Unlike Bitcoin’s famous four-year halving schedule, Ethereum block reward subsidies are subject to significant change on short notice. Meanwhile, operating expenses (e.g. electricity) and capital expenditures (e.g. mining equipment) are certain and usually paid in fiat.

Archer gives miners more certainty by boosting and diversifying revenue streams.

How Archer Boosts Miner Revenue

Archer uses on-chain incentive mechanisms to boost miner revenue.

Opportunities take the form of dex arbitrage, lending liquidations and other zero-risk or risk-minimized ways to add value to mined blocks. The system evaluates each opportunity and sends miners transactions that maximize their revenue. In short, Archer replaces low-value transactions with high-value transactions.

Suppliers are an elite group of on-chain analysts who are responsible for discovering on-chain opportunities. Suppliers who submit profitable opportunities share revenue with miners.

Example transaction from technical pilot

Archer Benefits the Application Layer

The core benefit of Archer for miners and suppliers is clear: better revenue. Stakeholders on the application layer also benefit from a reliable connection to block producers.

On-chain incentive mechanisms become more effective and front-running becomes less effective. These benefits lead to many potential improvements to the Ethereum user experience, including:

  • Lower collateral ratios due to more robust liquidations
  • Consistent spot prices across dexes
  • More reliable incentive mechanisms
  • Less front-running
  • Private channels to submit transactions

The losers in this equation are existing bots, especially those that front-run transactions in the mempool and strain the network.

Archer aims to improve the Ethereum ecosystem by focusing on sustainable revenue and contributing to a well-functioning network.

An Ownership Economy with Archer DAO

Archer has been designed to be managed as a DAO from its inception due to its many diverse stakeholder groups. Archer affects all Ethereum users, regardless of whether they are aware it exists and whether they actively participate in the Archer network.

Active participants in the network will be rewarded ARCH governance tokens. These tokens may be used to join private discussion channels and vote on issues facing the network.

We look forward to productive discussions about the short- and long-term effects of Miner Extractable Value, leading to tangible outcomes from governance processes.

Archer is Live in Production Today

Archer has been running in production since August, consistently producing additional revenue for miners. This highly successful technical pilot has allowed us to streamline new integrations to a five-minute process for block-producing nodes.

We are currently working to expand the network by including more miners and suppliers. If you are interested in joining the network, please book an intro call and join our community.

Mine Smarter

Archer boosts miner revenue with a five-minute integration. Live now on Ethereum. Visit our website and join Discord to learn more.